One of the IMF's former European chiefs says Germany, not Greece, should leave the euro

Five years ago Ashoka Mody was an assistant director at the
International Monetary Fund (IMF), responsible for some of the
bailouts required during the euro crisis — but now he thinks it
would be best if Germany left the eurozone.

In his time at the IMF, Mody was in charge of the IMF's Article
IV consultations with Germany — those are the institution's
regular checkups on each country's economy. He was also
responsible for engineering the IMF's contribution to Ireland's
bailout.

Unlike most people, Mody is happy that German finance minister
Wolfgang Schaeuble recently broke the taboo of officially
discussing countries leaving the euro.

But he wants to discuss that for a different reason than
Schaeuble: "It would be better for all involved, though, if
Germany rather than Greece were the first to exit."

Here's the crux of the argument:

A German return to the deutsche mark would cause the value of the
euro to fall immediately, giving countries in Europe's periphery
a much-needed boost in competitiveness. Italy and Portugal have
about the same gross domestic product today as when the euro was
introduced, and the Greek economy, having briefly soared, is now
in danger of falling below its starting point. A weaker euro
would give them a chance to jump-start growth. If, as would be
likely, the Netherlands, Belgium, Austria and Finland followed
Germany's lead, perhaps to form a new currency bloc, the euro
would depreciate even further.

In short, the currency union was a bad idea — but it might be
split into two more complementary parts. The value of the new
southern euro would be considerably lower, a good thing for the
countries in the south.

Mody also notes that while Germany's export explosion may lose a
bit of steam, it wouldn't be a bad thing for ordinary Germans to
have a much stronger currency, because they would become
richer in reality. When the Swiss franc unpegged from the euro
earlier this year, sending the value of Switzerland's currency
surging, Swiss manufacturers whined — but ordinary people flooded
out into neighbouring French towns to snap up the newly cheaper
goods on offer.

There's not much benefit in that sense for Greece to leave the
euro. It's a country of 11 million people, with a GDP similar to
that of Lower Saxony, one of Germany's 16 states. Its departure
will not strengthen the euro considerably for German households,
and the currency will still be too strong for Italy, Spain, and
Portugal.

He finishes the article with a political argument about Germany's
place in Europe:

Perhaps the greatest gain would be political. Germany relishes
the role of a hegemon in Europe, but it has proven unwilling to
bear the cost. By playing the role of bully with a moral veneer,
it is doing the region a disservice. Rather than building "an
ever closer union" in Europe, the Germans are endangering its
delicate fabric. To stay close, Europe's nations may need to
loosen the ties that bind them so tightly.